Costs for installing 5G infrastructure in India might increase due to conflict in West Asia!

If the situation between Hamas and Israel escalates, it could cost India’s telecom operators up to Rs 2,000 to 2,500 crore per year to import 5G network equipment. This is according to a report by The Economic Times, which cited industry experts. The report also said that this could delay the roll-out of next-gen networks by India’s major operators. 

If the conflict goes on and the Indian rupee depreciates 3-4% against the US dollar, it could lead to telecom companies having to pay more for debt service, which could hurt their profits in the coming quarters. India imports around two-thirds of its telecom equipment, which is used in its phone networks, from foreign vendors like Ericsson, Nokia, and Samsung. According to the report, India’s top telecom players, Reliance Jio, Bharti Air, Vodafone, and Idea are expected to spend up to $7 billion per year on imported networks.

The conflict between Israel and Hamas has not caused the rupee to drop as much as the US dollar, but if it becomes a bigger global issue, the rupee could drop by 3-4% against the dollar, which would make it more expensive for telcos to import 5G equipment since most of their domestic networks are still made up of imported equipment. Reliance Jio, for example, has borrowed over $4 billion to buy 5G equipment, and Bharti is still putting a lot of money into setting up its own 5G network.

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